Description

Benefits of Investing in InnSuites Hospitality Trust

As major long term trust investors themselves, the management team of InnSuites Hospitality Trust is dedicated to creating solid and growing value for all of its shareholders. The strategies the Trust is now putting in place for the future are focused on attaining the following benefits for shareholders:

Growth InnSuites Hospitality Trust is producing growth for its shareholders by leveraging different factors:

Increasing Revenue Per Available Suite ("REVPAR"), Average Daily Rate ("ADR"), and Occupancy.
An increasing ownership percentage by the Trust in RRF Limited Partnership, which owns the hotels (approximately 65% currently, up from 14% in fiscal 1999).
A focus on cost containment as a means of increasing operating profit margins.

Branding and Consumer Awareness Through its marketing efforts and the extra value offered to guests who stay at InnSuites Hotels, the Trust is building a strong regional consumer awareness of the “InnSuites”® brand. This consumer awareness and proprietary brand will allow the Trust to enter new markets that might not otherwise be available.

Stability The Trust has a history of paying dividends in each of the 35years since it was founded in 1971. Management expects to continue this record.

Valuation Unlike a number of historic companies, the Trust offers solid bricks and mortar value to back up the stock value of the Trust. In the opinion of management InnSuites currently undervalued compared to historical valuation levels and compared to the market net asset value.

Where We've Been...

Understanding the long and interesting history of InnSuites Hospitality Trust provides a useful basis for understanding the Trust's current business strategy and its future plans:

1971 - Cleveland, Ohio: Realty ReFund Trust was established as a Real Estate Investment Trust (REIT) traded on the New York Stock Exchange devoted to investments in wrap-around second mortgages on commercial properties. A 35-year history of dividends began.

1980 - Phoenix, Arizona: Unrelated to Realty ReFund Trust, Hospitality Corporation International is established by James Wirth as a privately-held hotel entity, doing business as “InnSuites Hotels”, and featuring value hotel suites with many complimentary extras.

Mid - 1990's: Due to a change in the market for second mortgages on commercial buildings, Realty ReFund Trust liquidates its mortgage portfolio and seeks a new direction.

January 31, 1998: After an 18 year history of operating as a privately-held entity, InnSuites Hotels and its affiliates combined with the Trust to form InnSuites Hospitality Trust, thereby establishing InnSuites as a publicly-traded company. In the formation, Hospitality Corporation International and affiliates contributed 7 hotels and Realty ReFund Trust contributed $2.1 million in cash.
James Wirth, Founder of InnSuites, joined the Trust as President along with his team. As part of the combination, RRF Limited Partnership was formed, which now owns 5 of the hotels (The 6th Yuma hotel is owned direct by the trust). Former investors in the InnSuites Hotels owned approximately 86% of the RRF limited partnership units. The Trust became the general partner and owned an average of 14% of the RRF Limited Partnership during fiscal 1999.
Early 1998: Following the combination, three additional hotels were acquired by RRF Limited Partnership.

Early 1999: Using equity and cash, InnSuites Hospitality Trust increased it's ownership share of RRF Limited Partnership to 42%, positioning the Trust to have a strong earnings base. Shares of InnSuites Hospitality Trust moved from the New York Stock Exchange to the American Stock Exchange.

Early 2004: InnSuites Hospitality Trust gave up REIT status and acquired managment and trademarks.

Early 2005: The Trust continues transformation with sale of under-performing assets generally at captial gains. Earning emphases is on internal operations management fees, trademark fees, and asset sales at capital gains.

...and Where We're Going

Increase Ownership in the RRF Limited Partnership: Over the past, the Trust has increased its ownership in the entity that now owns the InnSuites hotels to its current approximately 65% level. When compared to fiscal 1999's average ownership level of approximately 14%, this increase alone should result in future growth and net income. InnSuites Hospitality Trust plans to increase this ownership percentage further.

Increase the Revenue Per Available Room: Through a proven strategy of repositioning as suite hotels and upgrading consistent with the local environment of each of our properties, InnSuites expects to maintain growth in its Average Daily Rate (ADR) while still offering outstanding value to our customers. Through our marketing offers, we also expect to increase our occupancy percentage. When combined, these two factors should produce increasing Revenue Per Available Suite (REVPAR).

Contain the Trust's Costs: InnSuites will continue to identify and implement meaningful overhead and other cost saving plans, the results of which will flow directly to the bottom line.

Gain Recognition of the Investment Value Offered by InnSuites Shares: We plan to demonstrate our commitment to shareholder value by continuing our efforts to increase reported earnings.

Hidden Assets: Management believes that the net market value of hotel real estate assets exceeds the book value and will seek to benefit shareholders in this area.